The UK’s Financial Services Authority announced that it has levied its largest fine related to financial crime against insurance firm Aon Ltd. for failing to establish controls to prevent overseas bribery and corruption.
The FSA said it fined Aon £5.25 million (US$7.9 million) “for failing to take reasonable care to establish and maintain effective systems and controls to counter the risks of bribery and corruption associated with making payments to overseas firms and individuals.”
The regulator says that between January 2005 and September 2007, Aon failed to properly assess the risks involved in its dealings with overseas firms and individuals who helped it win business and failed to implement effective controls to mitigate those risks. As a result of that weak control environment, the firm made various suspicious payments, amounting to approximately US$7 million, to a number of overseas firms and individuals, it said.
“This is the largest financial crime related fine imposed by the FSA to date. It sends a clear message to the UK financial services industry that it is completely unacceptable for firms to conduct business overseas without having in place appropriate anti-bribery and corruption systems and controls,” said Margaret Cole, director of enforcement at the FSA.
“The involvement of UK financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity of the UK financial services sector,” Cole added.
The FSA said that Aon cooperated fully with the regulator and agreed to settle at an early stage of the FSA’s investigation. As a result, the firm qualified for a 30% discount under the FSA’s settlement discount scheme. Without the discount the fine would have been £7.5 million.
Since the discovery of its failings in 2007, Aon and its current senior management have demonstrated that they treat this matter with the utmost seriousness, the FSA added. And, Aon aid it has significantly strengthened and enhanced its controls around the usage of third parties, including: implementation of a global anti-corruption compliance programme; risk-based procedures to review all existing and proposed third party relationships; and, a globally implemented third party policy controlling and restricting the use of overseas third parties, particularly those in high-risk jurisdictions.
Peter Harmer, CEO of Aon Ltd., said, “We recognise and regret the failings that occurred in our systems and controls for payments to third parties and are pleased that our efforts to remedy and enhance our controls are considered by the FSA to be ‘a model of best practice that other firms may wish to adopt’.”
IE
UK regulator fines Aon unit for suspicious payments
- By: James Langton
- January 8, 2009 January 8, 2009
- 11:45